The vote will be held amid an economic crisis that will plague the country in the coming year.

Summary

At this time next year, Russia will hold its presidential election. In the lead-up to these elections, the Russian economy will continue on its current negative trajectory. At the same time, President Vladimir Putin, who is not as strong as he outwardly appears, will pursue more security and institutional measures to consolidate his power. Furthermore, the interests of Russia’s political opposition parties and the disgruntled public will increasingly overlap. While the opposition will not transform into a formidable political force by March 2018, the year ahead will lay the groundwork for this build-up.

• Russian opposition parties operate primarily at the street level and have little to no national-level organization since the Russian legal system favors pro-Kremlin parties.• Putin plans to use federal security forces and a new batch of appointed governors to control and quell unrest that is becoming more frequent in rural areas and secondary city centers far from Moscow.• The federal government can no longer afford to fund solutions for regions suffering from economic crisis; instead, the government has adopted a strategy that involves offloading this responsibility to local governments at the regional and municipal levels.

Introduction

Approximately one year from now, on March 18, 2018, Russia will hold a presidential election against the backdrop of an economic crisis that will continue to plague the country in the coming year. In our 2017 annual forecast, we cited internal developments as the most important issue facing Russia, but we do not expect the government to be challenged this year. However, the forecast also states that the Russian countryside will increasingly show signs of crisis, which will begin to turn public opinion against the current government. Growing dissatisfaction among the electorate during a presidential campaign year creates an opportunity for possible convergence of interests between opposition forces and dissatisfied voters. Convergence is very unlikely to transform into large-scale, organized political movements, but rather will serve as the preliminary groundwork on which future movements can build.

Russian President Vladimir Putin holds a meeting with permanent members of Russia’s Security Council at the Kremlin in Moscow on Dec. 28, 2016. MICHAEL KLIMENTYEV/AFP/Getty ImagesPolitical Parties

Putin is eligible for re-election but has not yet declared plans to run for office again. Regardless, he or a hand-picked successor will face little opposition at the polls in terms of contending political parties. This is because opposition forces in Russia express themselves primarily through street actions given that opposition parties do not have power in numbers that would allow them to be elected to any government office.Russian political parties operate in a limited capacity because the system favors pro-Kremlin parties; parties that do not support the government have little to no chance of gaining representation in the Duma, the lower house of the Russian parliament. Therefore, the various parties’ performance in Duma elections needs to be viewed in this light. Shortly after assuming his first presidency in 2005, Putin pursued measures to reduce the number of parties represented in the Duma. In 2012, then-President Dmitry Medvedev appeared to backpedal on this move and passed a law that simplified the registration procedures for political parties. On paper, the new legislation aimed to open the party system to alternative interest groups. In practice, this is not the case.Four political parties currently hold seats in the Duma, and all of them are pro-government parties to a degree. United Russia is Putin’s political party. It holds 343 seats and responds directly to the president, supporting any Putin-led policy or decree. The Communist Party holds 42 seats, the Liberal Democratic Party has 39, and A Just Russia has 23. The latter three parties are not seen as official government parties and therefore are considered to partly represent the opposition. However, the term “opposition” is used loosely here since the elected officials of these three parties rarely defy Putin-led initiatives. Votes cast by officials belonging to these parties reflect a disagreement with United Russia and bureaucracy while simultaneously staying loyal to the president and system. They have some mild distance from the regime but in no way oppose it.Russia’s anti-Putin opposition parties have essentially no representation at formal levels of government. Leading opposition parties the Russian United Democratic Party, or “Yabloko,” and the People’s Freedom Party, or “Parnas,” hold no seats in the Duma. They received only 1.9 percent and 0.7 percent of the vote, respectively, in September 2016 legislative elections. The minimum threshold for gaining a seat is 5 percent. At the regional level, only 16 small-party opposition candidates gained seats across regions that held local parliamentary elections. Additionally, Moscow has been known to take extreme measures to silence major opposition figures, discouraging the development of opposition parties. Leading anti-Putin political activist Boris Nemtsov was assassinated in early 2015 amid suspicion of potential Kremlin knowledge or involvement. Furthermore, on Feb. 8 of this year, Russian courts essentially barred the opposition’s leading presidential candidate, Alexei Navalny, from participating in the 2018 election by finding him guilty of defrauding a state company. By law, a person with a criminal conviction cannot seek elected office in Russia, and it is believed that the conviction was an unjust attempt to prevent Navalny from running in 2018.As a result, Russia’s opposition parties operate almost entirely at the street level with little to no national-level organization. Politically oriented street actions have started to take the form of “protest walks.” These walks consist of dozens of like-minded individuals discussing economic and political issues while walking through public spaces. Local media reports that such walks periodically occur in 60-75 cities and towns throughout Russia. In their present form, these walks are more a sign of solidarity than direct confrontation to the government. Such an approach helps to protect participants in that it makes potential arrests more problematic for pro-government security forces. This is because, in general, arresting passive strollers (rather than active protesters) runs the risk of sparking further public outrage against the government, and adding fuel to the fire is not a risk Moscow can afford to take at this time.

Continued Power Consolidation

Putin still monopolizes power in Russia and enjoys an approval rating of 86 percent. This figure, however, is misleading in that it gives the impression that Putin’s hold on power is more secure than it really is. As noted in our previous Deep Dive on Russia, Putin has dedicated much of his political capital and resources to consolidating his power via reforms in various government security bodies. By rebuilding his inner circle and revamping the power structure, Putin has demonstrated that he needs to extend his power network to ensure that his decrees and policies are implemented correctly and dissenters are crushed.The report also noted that Putin needed to ensure that his United Russia party won the September 2016 parliamentary elections to guarantee Duma support for the upcoming presidential election. United Russia, and therefore Putin, saw a substantial victory at the polls, winning 54 percent of the popular vote. Even so, United Russia saw a 12.5 percent decline in the number of actual votes cast compared to 2011. In the 2011 election, 60.2 percent of eligible voters participated and United Russia won 32 million votes, accounting for 49 percent of the popular vote. However, voter turnout was markedly lower in 2016, at 47.8 percent. While United Russia won 54 percent of the popular vote, the party brought in only 28 million votes. Therefore, voter support for United Russia appears to have declined in terms of real numbers.(click to enlarge)

Russia faces a number of social and economic problems that have resulted in unrest. For instance, after oil prices dropped in late 2014, Russia began to experience economic and labor protests. Such incidents began in 2015 with those most immediately affected by the low prices; as the impact of oil prices has continued to spread across the country, protests have escalated and continue today. Wage arrears (workers owed back pay), which affect both public and private workers, have become increasingly problematic in oil-dependent and single-industry economies throughout Russia’s interior and at port cities. The Center for Social and Labor Rights reported that 54 percent of observed protests in 2016 were due to wage arrears. Cuts in government social programs that affect payments to veterans and children have also led to public protests. Furthermore, unemployment in Russia has been on the rise since October 2016 reaching 5.6 percent in January. Other issues, such as general frustration with reduced standards of living due to economic strife, have also brought people to the streets. Economic and labor protests are still small, attracting protesters numbering in the low hundreds at most. These protesters, whose grievances are economic and social, have yet to align and merge with political opposition movements, but the growing and shared discontent with the Putin government is creating space that could facilitate and expedite such alignment.

As economic and social problems persist, so do Putin’s moves to consolidate power in the security sphere and political arena. Severe financial constraints prevent him from solving the economic crisis in advance of the 2018 election, so he seeks to suppress and control economic unrest through increased security measures. On Feb. 2, the Russian government published a presidential decree that removed 16 generals from their posts in the Ministry of Civil Defense, Emergencies and Elimination of Consequences of National Disasters (EMERCOM) and Interior Ministry, replacing them with officials selected by Putin. Thirteen of the dismissals were in EMERCOM, the government office responsible for responding to civil defense, public unrest and protests. The ministry is divided into eight regions and three special directorates (Moscow, Crimea and Sevastopol). The dismissals primarily affected three regions: the Caucasus, the Far East and cities within Moscow’s reach. Each of these regions has seen reports of increased unrest due to bankruptcy, wage arrears, cuts in education funding and decreased funds for veterans programs. The reshuffling of EMERCOM authorities shows that Moscow deems the threat of unrest as serious and wants to keep matters from escalating by having trusted officials in place to carry out government policies.

Putin’s most recent move to consolidate his political power at both regional and national levels is a purge of Russian governors. This is an important move because of the significant interplay between governors and members of the national government, who often work together, depend on each other, and look out for one another’s interests. Gubernatorial elections were reintroduced in 2012. But, while the law to reintroduce them was making its way through the system, over 20 governors were reappointed by the Kremlin, delaying elections in these locations until 2017. Then, in 2013, Putin signed a law that permitted regional legislatures to decide between directly electing governors or having the regional legislature select and appoint a governor from a candidate short list drawn up by Putin.

Regional governors, in turn, play a role in appointing members to Russia’s Federation Council, the country’s upper chamber of parliament. The council consists of two representatives from each of Russia’s 83 federal entities. One representative is chosen by the regional legislature and one is selected by the region’s governor. The length of the representative’s term varies with the federal entity. Built in this system is a level of reciprocity between governor and president, further allowing Putin to consolidate power. He is able to ensure a candidate gains a gubernatorial office; in return, the governor can appoint a pro-Kremlin member to the council. This relationship becomes even more important when one considers that the council is the body that approves presidential decrees for martial law, declares a state of emergency, deploys troops abroad, oversees the presidential appointment for attorney general, and decides impeachment verdicts.

In late December 2016, the St. Petersburg Politics Foundation, an institution close to the Kremlin, anticipated the 2017 removal of 10 governors whose terms were set to expire later this year, and whose replacements would be appointed. Those named were governors from Buryatia, Perm, Ivanovo, Karelia, Novgorod, Pskov, Ryazan, Samara, Saratov and Sverdlovsk. Since early February, these governors have begun to resign from their posts. To date, there have been gubernatorial resignations in Ryazan, Novgorod, Buryatia, Karelia and Perm with new governors appointed by Putin. In January, the same foundation also identified other “underperforming” governors whose terms could also be brought into question. They are from Tomsk, Mordovia, Belgorod, Novgorod, Pskov, Nizhny Novgorod, Orel and Samara.

Putin’s ultimate aim is to remove governors who have fallen out of favor in regions where social unrest is becoming more commonplace and replace them with people the national government considers to be more capable because of their abilities to develop relationships with local elites, their lack of involvement in corruption, their positive track records with macroeconomic-related work, and their willingness to support Putin’s policies. Putin has signaled he wants the replacement governors to be young technocrats. So far, five governors have been replaced. The newly appointed governors are, on average, 20 years younger than their predecessors and have few ties to politics. Appointing candidates with minimal political ties serves two purposes. First, it means that the governors derive their power entirely from the Kremlin’s consent, which forces them to be highly accountable to Moscow. Second, the lack of political ties allows them to forge relationships with more varied interest groups and local elites.

The new governors’ ages and technical backgrounds in economics and investment are seen as advantages for carrying out ambitious regional projects that, if successful, would put the economy back on track, quell unrest, and make the national government appear more favorable to voters. The Russian government also expects the youthful officials to be more motivated and ambitious than their predecessors. Additionally, Moscow plans to draw on their backgrounds and expertise to assist with discovering and furthering economic and infrastructure challenges at the regional level. These new governors bring intangible values to the table such as drive and know-how. Moreover, they will ensure that pro-Putin members are appointed to the Federal Council and will not challenge Putin’s power. Even so, they will still face the same financial constraints and social demands of their predecessors. While they may be able to alleviate some problems, there is a limit to how far even the most capable of managers can stretch their budgets and resources.

Transfer of Economic Responsibility

The Russian government is in the midst of designing and implementing a strategy that entails offloading responsibility for addressing regional economic and social problems to local officials. With national revenue flow severely compromised by low oil prices and dwindling reserve funds, Moscow cannot afford to simply prop up regions by transferring funds. Rather, the government now seeks to mobilize each region’s internal resources for development and attract as much investment as possible. Ultimately, the Kremlin wants governors, mayors and citizens to assume more responsibility for the socioeconomic development of their regions because the federal government can no longer carry the economic burden.As part of this offloading process, the government has renewed its focus on programs to help develop single-industry towns. In 2009, Putin ordered the creation of a special group to study the status of Russia’s single-industry towns after the 2008 economic crisis. This group still exists today and has seen an uptick in its workload over the last two years. Russia currently has 319 single-industry towns, with 100 classified as being in the “red zone.” Towns in red zones face the country’s stiffest economic challenges and receive a special monitoring mission led by a government-appointed official whose job is to assess the economic status and external markets for export-oriented enterprises and possibly convert the town’s output for domestic consumption. Typically, the official also makes recommendations about how to improve the town’s economic situation.Russia’s strategy calls for single-industry towns to diversify their economies in order to stabilize their economic condition. One major means to this end is establishing and developing small and medium-sized businesses. Moscow is also trying to motivate local citizens to carry out initiatives that help deal with economic problems at the municipal level. The funding for these projects is minimal and serves as yet another example of how funneling federal spending to the regions is no longer a viable option. For instance, subsidies for the Single-Industry Towns Fund will have an approximate budget of only $258 million for 2017-2019. This is a miniscule amount compared to the approved 2017 budget of $221.4 billion. Furthermore, the fund’s financial support in 2015-2016 benefited only 17 of the country’s 319 single-industry towns. There is simply not enough funding to consider this program successful or viable for transforming local economies.(click to enlarge)

Offloading economic development burdens to the local level poses a risk to the federal government, once again illustrating that it is not as strong as it would like to appear. To some extent, the move entails distributing power rather than reining it in. However, the risk must be taken since Moscow simply does not have the funds to solve the economic problems that plague the federation. However, Russia has mitigated this risk by appointing governors with strong economic and investment backgrounds. Furthermore, the nature of Russian political culture will frame Putin in a positive light throughout the shift, further reducing risk. Historically, people hold local authorities and elites responsible for economic and social problems and are therefore likely to blame these local officials rather than Putin and the national government. In recent months, as people have observed increased economic hardships in their daily lives, those local figures have been seen as failing. Instead, people have begun to look toward Russia’s central political figure, Putin, to solve their problems. Putin’s leadership image resembles that of a czar in that he is both feared and revered. Propaganda plays on this image and creates a scenario where much of the public fears Putin but also views him as the only figure capable of leading them through this crisis.

Conclusion

The upcoming 2018 election will offer a small starting point for opposition forces and a disgruntled electorate to conceive and potentially build a unified front. However, this front will not be able to transform itself into a large-scale, organized political movement in time for the election. The Russian population is no stranger to enduring economic hardships. It is also accustomed to seeing arrests and large fines as consequences for public protest against the government. This creates a certain level of reluctance to actively lash out against the government – a reluctance that requires severe hardships and desperation to be overcome. Although there will be protests and uprisings in the coming year, they will be too small to reach a critical mass; this is due, in part, to the varying levels and duration of hardship experienced by the Russian people. The building blocks for an organized and sizable Russian opposition force are currently taking shape. However, the assembly process has yet to start and, like most major construction projects, will take a long time to be completed.

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.